In re: Kizzee-Jordan, No. 09-20777

By FindLaw Staff on November 12, 2010 1:06 PM

Reversal of Confirmation of Chapter 13 Plan

In In re: Kizzee-Jordan, No. 09-20777, the court reversed the bankruptcy court's order confirming a Chapter 13 plan, holding that a third-party lender who pays a debtor's ad valorem taxes and receives a transfer of the local taxing authority's tax lien under Texas law holds a tax claim protected from modification by 11 U.S.C. section 511 of the Bankruptcy Code.

As the court wrote: "In this case, we must consider whether a third-party lender who pays adebtor's ad valorem taxes and receives a transfer of the local taxing authority's tax lien under Texas law holds a tax claim protected from modification by 11 U.S.C. § 511 of the Bankruptcy Code. We conclude that the third-party lender's claim is a tax claim, and that the interest rate due thereon may not be modified by a debtor's Chapter 13 reorganization plan. We therefore AFFIRM the district court's judgment."

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